Inflated Emergency Room Charges: Is Common Sense on Life Support?

Jackson, MSThe growing dispute over emergency room charges and other sources of angst over inflated charges for hospital services has opened a chasm of contempt between a hospital franchise and a blue-chip health network. The resulting rift between Blue Cross & Blue Shield (Blue Cross) and Health Management Associates (HMA) is poised to inconvenience patients in potentially serious fashion.

The issue that lay at the root of the problem centers on charges and fees for service that is often viewed as inflated for those patients that carry adequate health insurance. Previously, industry watchers have noted that losses incurred for emergency treatment for patients who are poor and cannot afford health insurance are recovered by inflating emergency room cost and other charges for patients who are adequately covered.

And often it isn’t just the patients who find themselves in dispute-medical-bill mode. Health management organizations (HMO) will also find themselves calling out a hospital over an allegedly inflated emergency room bill, together with other costs.

That appears to be the issue surrounding the dispute between HMA and Blue Cross. According to a report in the Associated Press (AP 9/17/13), HMA launched a $13 million lawsuit in June against Blue Cross, accusing the provider of underpaying for procedures. Blue Cross countered that HMA hospitals overcharge for services such as an ER bill or other procedures.

A few days after HMA initiated its lawsuit, Blue Cross announced it would be pulling the plug on HMA hospitals. The health network terminated its relationship as of August.

What that means for patients who are part of the Blue Cross network is that cost for treatment at the 10 hospitals in the state of Mississippi owned by Florida-based HMA will be higher. Typically, a patient treated at a hospital that does not observe or is not a part of a patient’s health network is looking at a 50-percent co-pay for ER charges and other hospital bills.

According to an editorial in the Hattiesburg American (9/28/13), lawmakers in the state of Mississippi have been discussing what to do on behalf of its constituents, and are eyeing an “any willing provider” law already in place governing the pharmaceutical industry.

Meanwhile, inflated emergency room bills and other sources of hospital overcharging are hardly a domestic problem.

According to the Evening Standard of London (8/28/13), private hospitals in the UK overcharge patients for services to the tune of two-hundred-million British Pounds Sterling per year. Translated to US funds, that’s a staggering $318,874,756.99 per year, or so it is alleged.

A Competition Commission inquiry in that country has accused three major hospital groups in the UK of making “excessive profits” of between $827 million and $923 million over a three-year period ending in 2011. That’s closing in on the equivalent of a billion US dollars that hospitals in the BMI, HCA and Spire networks are alleged to have overcharged patients.

Meanwhile, in Mississippi, the dispute between Blue Cross and HMA is cause for concern amongst doctors who wonder as to where their patients will now go for affordable health services, and how far they will have to travel in a delicate condition, such as that of childbirth.

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According to AP, Dr. Shani Meck told lawmakers at the combined legislative hearing held by the House and Senate insurance committees September 23 that many of her Blue Cross patients who had been planning to give birth at a nearby HMA hospital will now have to travel to other hospitals within the Blue Cross network miles away. In the throes of labor, which can often come on quickly, that could be a serious issue for patients.

The ob-gyn went on to say that in the absence of HMA hospitals, there were probably too few labor and delivery rooms or surgical suites available to handle the number of expected births in the Jackson area, leading to speculation that women are in danger of going through the rigors of labor or even childbirth in hospital hallways.

Will this result in additional lawsuits over hospital overcharging? Time will tell. In the meantime, it appears that common sense remains on life support…

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